Original publication date: March 31, 2016

Key takeaways:

• Sports culture has conditioned fans to think about success in one-year increments. However, investors, unlike sports fans, don’t start from zero at the beginning of each year.
• In investing, the best performers are those who perform above average, even if not spectacularly so, year-in and year-out with few if any poor years.

Major League Baseball’s 2016 season starts on April 3, and with it the hopes of every team’s fans for a World Series championship. Spring is when fans of last year’s losing teams such as the Philadelphia Phillies (99 losses last year), the Cincinnati Reds (98 losses) and the Oakland Athletics (94 losses) can erase the memories of last year and start at 0-0 like everyone else. As a sports fan and an investment manager, I’ve often thought about what constitutes excellence in both disciplines. My inner sports fan has been conditioned since childhood to think about baseball and other team sports as one-year contests of superiority. The teams play their regular season schedules, with the best among them moving into a playoff, and the winners of that playoff meeting in a championship game or series. The championship winner claims the bragging rights for that season, everyone rests for several months, and the next year the cycle repeats starting with a clean slate.